Asia watch

London-listed bank group HSBC has expanded into Thailand, reportedly paying US$920 million (£584 million) for a 75% stake in nationalised Bangkok Metropolitan Bank.

An HSBC spokesman in Hong Kong would only say that discussions on the sale were 'proceeding,' but reports from Thailand claim the deal was finalised at a meeting late last night.

Bangkok Metropolitan Bank is one of the Thai banks nationalised by the government in the aftermath of the 1997 financial crisis, and is currently under the control of the Bank of Thailand's Finance Institutions Development fund.

A number of foreign players, including Standard Chartered, ABN Amro and Singapore's DBS have already bought nationalised Thai banks.

HSBC has so far missed out on any bargains from the Asian banks fire sale, with its bid for Korea's Seoulbank foundering last year after disagreement with the government.

Reports of the Bangkok Metropolitan purchase did little for HSBC shares in Hong Kong. The stock continued its recent lacklustre performance, slipping 25 cents to HK$87.75.

Brokers said sentiment towards HSBC was also being influenced by news of a US$2.6 billion legal action against the bank by 11 Japanese investors, who allege they were given misleading information about the value of investments held by the bank.

The dip in HSBC shares came amid weaker Hong Kong stocks, the blue-chip Hang Seng index off 23.60 at 15,203.79 shortly before the mid-session break.

The other focus was Richard Li's Pacific Century Cyberworks, the shares up a modest 10 cents to HK$13.05 amid speculation that SingTel and Rupert Murdoch's News Corporation were set to launch another bid for Cable & Wireless HKT.

PCCW snatched HKT from under the noses of SingTel and News in March, but the value of the deal, US$36 billion-US$38 billion at the time, has since fallen around US$11 billion as a result of PCCW's tumbling share price.

HKT shares were up 35 cents to HK$18.20, compared with HK$16.50, which is equivalent to PCCW's cash and shares offer.

Elsewhere, most markets were treading water ahead of US growth and employment figures due today, which have once again raised the spectre of a US interest rate increase.

Tokyo shares traded listlessly, the Nikkei 225 Average closing down 115.14 to 18,019.17.

Among active stocks, Toshiba was the volume leader, up almost 5%, while shares in retail group Sogo slumped around 14% to a record low on news of the company's debt problems. There was no respite for embattled internet investor Hikari Tsushin, the shares down by their daily limit again and ask-only at 13,800 yen.

Other markets were mixed, with Singapore the best performer, the Straits Times index up 36.42 to 2145.22.

A 1% gain for News Corporation in Sydney helped limit the falls for the wider All Ordinaries index, down 17.8 to 3066.7.